BlackRock Frontiers Portfolio Update

 
TIDMBRFI 
 
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706) 
 
All information is at 30 April 2023 and unaudited. 
 
Performance at month end with net income reinvested. 
 
                                        One    Three     One    Three     Five    Since 
                                      month   months    year    years    years   Launch* 
                                          %        %       %        %        %         % 
 
Sterling: 
 
Share price                             0.4     -0.7     4.0     74.5      2.3     112.1 
 
Net asset value                         2.5      2.6     2.1     78.0     16.1     135.8 
 
Benchmark (NR)**                        1.3     -1.9    -8.9     35.3      8.3      79.2 
 
MSCI Frontiers Index (NR)              -1.1     -2.9   -14.9     18.7     -1.6      58.9 
 
MSCI Emerging Markets Index (NR)        0.2     -3.9    -3.8     17.4      7.1      51.3 
 
US Dollars: 
 
Share price                             2.0      1.3     4.2     74.0     -6.5      71.9 
 
Net asset value                         4.2      4.7     2.3     77.5      6.1      90.7 
 
Benchmark (NR)**                        3.0      0.1    -8.8     34.8     -1.2      45.5 
 
MSCI Frontiers Index (NR)               0.5     -0.8   -14.8     18.3    -10.2      28.1 
 
MSCI Emerging Markets Index (NR)        0.2     -3.5    -5.3     15.1     -3.8      20.0 
 
Sources: BlackRock and Standard & Poor's Micropal 
 
* 17 December 2010. 
 
** The Company's benchmark changed from MSCI Frontier Markets Index to MSCI 
Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (net 
total return, USD) effective 1/4/2018. 
 
 
At month end 
 
US Dollar 
 
Net asset value - capital only:                                                182.56c 
 
Net asset value - cum income:                                                  186.15c 
 
Sterling: 
 
Net asset value - capital only:                                                145.25p 
 
Net asset value - cum income:                                                  148.10p 
 
Share price:                                                                   135.00p 
 
Total assets (including income):                                               £280.4m 
 
Discount to cum-income NAV:                                                       8.8% 
 
Gearing:                                                                           nil 
 
Gearing range (as a % of gross assets):                                          0-20% 
 
Net yield*:                                                                       4.2% 
 
Ordinary shares in issue**:                                                189,325,748 
 
Ongoing charges***:                                                               1.4% 
 
Ongoing charges plus taxation and performance fee****:                            1.4% 
 
*The Company's yield based on dividends announced in the last 12 months as at 
the date of the release of this announcement is 4.2% and includes the 2022 
interim dividend of 2.75 cents per share, declared on 26 May 2022, and paid to 
shareholders on 24 June 2022 and the 2022 final dividend of 4.25 cents per 
share, declared on 8 December 2022, and payable to shareholders on 19 January 
2023. 
 
** Excluding 52,497,053 ordinary shares held in treasury. 
 
***The Company's ongoing charges are calculated as a percentage of average 
daily net assets and using the management fee and all other operating expenses 
excluding performance fees, finance costs, direct transaction costs, custody 
transaction charges, VAT recovered, taxation and certain non-recurring items 
for Year ended 30 September 2022. 
 
**** The Company's ongoing charges are calculated as a percentage of average 
daily net assets and using the management fee and all other operating expenses 
and including performance fees but excluding finance costs, direct transaction 
costs, custody transaction charges, VAT recovered, taxation and certain 
non-recurring items for Year ended 30 September 2022. 
 
Sector                          Gross market    Country                Gross market value as 
Analysis                     value as a % of    Analysis                   a % of net assets 
                                  net assets 
 
Financials                              38.5    Indonesia                               17.4 
 
Industrials                             14.5    Saudi Arabia                            15.5 
 
Energy                                  14.5    United Arab Emirates                     8.1 
 
Materials                               13.6    Kazakhstan                               8.0 
 
Consumer Staples                        10.2    Vietnam                                  7.8 
 
Information Technology                   5.4    Thailand                                 7.4 
 
Communication Services                   4.4    Hungary                                  7.4 
 
Consumer Discretionary                   3.2    Chile                                    5.9 
 
Real Estate                              2.6    Greece                                   4.3 
 
Health Care                              1.6    Poland                                   3.5 
 
                                       -----    Qatar                                    3.1 
 
                                       108.5    Colombia                                 2.7 
 
                                       -----    Argentina                                2.5 
 
Short positions                         -3.8    Egypt                                    2.3 
 
                                       =====    Philippines                              1.9 
 
                                                Panama                                   1.9 
 
                                                Peru                                     1.7 
 
                                                Georgia                                  1.7 
 
                                                Malaysia                                 1.5 
 
                                                Kuwait                                   1.3 
 
                                                Romania                                  1.0 
 
                                                Kenya                                    0.7 
 
                                                Cambodia                                 0.6 
 
                                                Ukraine                                  0.3 
 
                                                                                       ----- 
 
                                                Total                                  108.5 
 
                                                                                       ----- 
 
                                                Short positions                         -3.8 
 
                                                                                       ===== 
 
*reflects gross market exposure from contracts for difference (CFDs). 
 
Market Exposure 
 
 
        31.05  30.06  31.07  31.08  30.09  31.10  30.11  31.12  31.01  28.02  31.03  30.04 
         2022   2022   2022   2022   2022   2022   2022   2022   2023   2023   2023   2023 
            %      %      %      %      %      %      %      %      %      %      %      % 
 
Long    107.9  106.1  107.3  107.3  106.2  107.4  106.2  110.7  112.4  111.9  106.3  108.5 
 
Short     4.7    4.6    6.2    5.3    5.2    5.3    4.8    4.9    5.1    3.9    3.9    3.8 
 
Gross   112.6  110.7  113.5  112.6  111.4  112.7  111.0  115.6  117.5  115.8  110.2  112.3 
 
Net     103.2  101.5  101.1  102.0  101.0  102.1  101.4  105.8  107.3  108.0  102.4  104.7 
 
Ten Largest Investments 
 
Company                                 Country of Risk        Gross market value as a 
                                                                       % of net assets 
 
Bank Central Asia                       Indonesia                                  5.1 
 
Astra International                     Indonesia                                  3.9 
 
PKO Bank Polski                         Poland                                     3.5 
 
Saudi Basic Industries Corp             Saudi Arabia                               3.2 
 
Abdullah Al Othaim Markets              Saudi Arabia                               3.2 
 
JSC Kaspi                               Kazakhstan                                 3.1 
 
OTP Bank                                Hungary                                    3.0 
 
Bank Mandiri                            Indonesia                                  2.9 
 
Wizz Air Holdings                       Hungary                                    2.9 
 
Halyk Savings Bank                      Kazakhstan                                 2.8 
 
 
 
 
 
Commenting on the markets, Sam Vecht, Emily Fletcher and Sudaif Niaz, 
representing the Investment Manager noted: 
 
 
The Company's NAV was up by 4.2% in April, strongly outperforming its 
benchmark, the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi 
Arabia Index ("Benchmark Index") which was up by 3%. For reference, the MSCI 
Emerging Markets Index had relatively muted performance and returned 0.2% while 
the MSCI Frontier Markets Index was up by 0.5% over the same period. All 
performance figures are on a US Dollar basis with net income reinvested. 
 
The Company's outperformance was primarily driven by country allocation 
particularly in Eastern Europe where gas prices moved close to the lowest 
levels since the beginning of the energy crisis boosting hopes of a stronger 
economic recovery and buoying equity markets. Oil prices also retreated to near 
levels seen before Russia's invasion of Ukraine. This decline in energy prices 
and commodities at large should help temper the outlook for global inflation. 
We observe a growing consensus around peak US interest rates. A gradual 
reversal from here should bode positively for emerging markets, with the caveat 

of an unexpectedly severe recession in the US. 
 
In our universe, Eastern European markets were the top performers, notably 
Poland (+13%), supported by strong earnings from the banking sector and 
optimism surrounding the consumer recovery. Elsewhere, Indonesia (+7%) did well 
from the gradual structural shift underway in its balance of payments from 
downstream nickel exports. On the other hand, equity markets in Turkey (-5%) 
and Thailand (-3%) were challenged given increased political uncertainty from 
general elections in both countries in May. 
 
Several stock picks did well in April. It is encouraging to see earnings 
delivery and capital return by our holdings starting to reflect in market 
valuations. Polish Bank PKO (+17%) was the top performer following strong 
earnings results. Indonesian auto conglomerate Astra International (+15%) 
performed well given good results, and importantly, improved capital returns 
via larger than anticipated dividend payment. Kazakh bank Halyk (+16%) also 
contributed positively during the month on back of strong results and capital 
return. On the other side, Colombian bank Bancolombia was the weakest link 
(-12%) from the unexpected dismissal of the country's finance minister. Mitra 
Adiperkasa (-7%) was the second worst performer; we believe this is from 
short-term profit taking as the Indonesian consumer confidence remains robust. 
 
We made few changes to the portfolio in April. We trimmed our exposure to 
Colombia following news of the change in finance minister. We took some profits 
across a few names such as Saudi grocery operator Al Othaim which had an 
outsized move on heels of a bonus stock dividend and also in Argentinian energy 
company Vista on strong performance. 
 
We believe global markets are still adjusting to a significantly higher cost of 
capital and remain vulnerable to unexpected hiccups such as the liquidity 
crisis in the regional banking space in the US. However, through the last few 
years, we have observed a marked contrast in the monetary and fiscal policy 
decisions taken in small emerging/frontier markets versus developed markets and 
this keeps us optimistic on our opportunity set. Our investment universe, in 
absolute and relative terms, remains under-researched and this should enable 
compelling alpha opportunities. 
 
Sources: 
 
1BlackRock as at 30 April 2023 
 
2MSCI as at 30 April 2023 
 
19 May 2023 
 
ENDS 
 
Latest information is available by typing www.blackrock.com/uk/brfi on the 
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV 
terminal). Neither the contents of the Manager's website nor the contents of 
any website accessible from hyperlinks on BlackRock's website (or any other 
website) is incorporated into, or forms part of, this announcement. 
 
 
 
END 
 
 

(END) Dow Jones Newswires

May 19, 2023 09:46 ET (13:46 GMT)